Selling a House In Post Quake Chch

Sitting in our BBQ area (you have visualise people!) on Xmas Day 2011

Selling a house in post-quake Christchurch is easy…….. yeah right!

Actually I shouldn’t be too cynical because we managed to sell within the first few weeks of putting Fairford Street on the market although due diligence took quite a while with much to-ing and fro-ing.

Here are some of the issues we encountered with Christchurch post-quake selling.

Insurance

Insurance is probably the most interesting scenario.  After September 2010’s earthquake, insurance companies were forced to take stock of their level of exposed risk which for them, it meant a lot of uncertainty on how best to progress with current and new policies.  One of the outcomes of this was no new insurance business was being taken on but, new approaches to insurance between two existing policyholders became more prevalent.

It became normal practice with the agreement of the buyer and the vendor to transfer house policies between the two so effectively, the policy stays with the house not the policy holder.  Fortunately we found a buyer that was with the same company as us so once the company had established their new ‘systems’, the transfer was quite painless.

Nervous Red-zoners

The earthquake exposed a lot of areas of Christchurch that had land that was too unstable to justify rebuilding or repairing on.  The government designated these areas as the Red Zone.  Home owners in these areas have been offered payouts or alternative solutions with the end result for them being, they have to move somewhere else.

The people who bought Fairford Street were from the Red Zone and were (understandably) cautious on making sure their next house and the land it was on was not going to fall to bits during the next earthquake.  Long story short, we were ‘requested’ to make a couple of fix ups which were more an exercise to appease buyer nerves than structural compromises.  With the help of a very good family friend who happen to be an excellent builder (thanks Graeme!) we got the these issues resolved.  Overall, Fairford Street was a good house which stood up very well to the earthquakes so we were very confident there were no real issues with it.  An engineers report confirmed that.

Building Companies

While this isn’t technically part of selling a house, our sale agreement was conditional on us getting finance for a new build.

What you look for in a building company changed so a previously nondescript criteria became top priority for us.  Design, build quality and value for money all took a back seat to, getting a company that could transfer construction insurance to be  a private house hold policy.

While we were lucky the company we have gone with were able to provide an assurance they could secure builders construction insurance that can be transferred to a private policy, a couple of companies couldn’t.  This was nothing to do with the building companies being cowboys (a few very good ones were in this situation), it was down to the construction insurance they carried couldn’t be transferred to a private holder – a requirement to meet finance criteria from most banks.

A combination of all of the above issues meant that while we had purchasers signed up within three weeks of putting our house on the market, it took another couple of months to get everything confirmed.  Two months of waiting and hoping can add a few grey hairs to the scalp that’s for sure!